1. Nope, the various difficulty levels determines how many points you recieve and the strength of the AI's units as well as how well the AI performs.

2. A unit defending does get a negative modifier for each unit next to it (if you move a unit next to an enemy and hover over it, it might predict 1:4 in losses, but if you move another unit next to it, it might say 1:5, add another and you might see 0:5), so the defendingg units does not have a specific way the are facing.

Regarding moving another friendly unit next to another enemy unit before initiating an attack meaning you will have at least two friendly units next to an enemy unit (well read page 29 of the manual) But it seems according to the manual the units that are next to the enemy unit MUST be able to ATTACK in order to contribute to this "mass attack" meaning they have not attacked yet during the turn.

Here it is verbatim from the manual page 29 (area underlined for emphasis)

MASS ATTACK Mass attack happens when an enemy unit is surrounded by more than one of your units able to attack it. Such a situation is favourable for launching attacks on an enemy unit because it is stretched along a wider front, and so part of its strength cannot react to your attacks in a timely manner. The game models this fact by giving defending unit an initiative penalty for every enemy unit standing next to it. In order to contribute to mass attack effect, your unit must be able to attack the enemy unit and have unspent attack action. Also, ranged units like artillery are not counted.